Author Topic: Appealing property tax appraisal with the city assessor  (Read 1968 times)

Foggier

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Appealing property tax appraisal with the city assessor
« on: October 30, 2014, 08:50:29 PM »
So, I purchased a rental prop some months back as the #s made sense, but oddly the the house was appraised for property tax at a really nutty level (nearly 40% above what I paid). One morning I call the assessment department to inquire about this and they tell that for the purposes of the mill rate the prop was valued using a sales market approach:

'OK', I say, 'but how do you get such a big number?'

'Oh we did it on Q1 __2008__ sales data' (!!)

'Whoa. But, why are you using such old data; I don't get it'

'We have a mandate to re-evaluate the entire town once every 5 years because it's expensive, lots of effort, blah blah blah...'

'But then the appraisal should have changed in 2013? It didn't, yeah?'

'Oh right, yeah, we decided to put the re-eval off for a year'

'So, you're doing the re-eval this year/right now then?'

'No, we haven't decided when we will redo it' (WTF)

Anyway, so I went on to tell him this all didn't seem super fair to value a prop using data from right before the housing crash and then renege on a previously scheduled re-eval. He seems to empathize and agrees with me and tells me to come in person in March for appeal hearings which apparently can only happen once every year in that one special month in a single room. 

I fully intend to show up and argue my case - it could save me $2k/yr in taxes and I don't see how they could possibly reappraise the prop higher than it is now!

What do you guys think about this? Anyone succeeded with such an appeal? Anyone think I'm stupid for stirring up a den of professional bureaucrats?

« Last Edit: October 30, 2014, 08:55:02 PM by Foggier »

MDM

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Re: Appealing property tax appraisal with the city assessor
« Reply #1 on: October 30, 2014, 09:26:46 PM »
So, I purchased a rental prop some months back as the #s made sense, but oddly the the house was appraised for property tax at a really nutty level (nearly 40% above what I paid).
...
I fully intend to show up and argue my case - it could save me $2k/yr in taxes and I don't see how they could possibly reappraise the prop higher than it is now!
[1]What do you guys think about this?
[2]Anyone succeeded with such an appeal?
[3]Anyone think I'm stupid for stirring up a den of professional bureaucrats?
1.  Do it.
2.  Yes, in exactly your situation.  If you can demonstrate that your purchase was an arm's length transaction then you should win easily. 
3.  It may not be such a den.  In my city the appraisal appeals board has "real people" on it, in addition to a bureaucrat or two.

msming

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Re: Appealing property tax appraisal with the city assessor
« Reply #2 on: October 31, 2014, 05:32:21 AM »
It sounds as if you may as well challenge the assessment; you don't have much to lose and could save a good amount in taxes if you succeed.  I don't know where you live, and assessment practices do vary from state to state. 

At least where I live, in New York, cities and towns get to decide how often they do a city- or town-wide revaluation of property.  This isn't a great practice because some can go years or even decades between revaluations.  But the state requires each year's assessment for taxes to be a uniform percentage of properties' fair market value (100%, 50%, etc.).  This is a difficult goal to hit even right after a revaluation, and it becomes impossible as years go by and individual properties' values change at different rates.

If you want to challenge your assessment, you should do some research before meeting with the assessor.  It may not be enough just to point out that your property is assessed for much more than you bought it for.  Try to identify multiple other comparable properties that are assessed for much less than yours.  This will increase your chances of success. 

(I'm also assuming your rental property is a one- or two-family house.  If it's an apartment building, say, then it may be considered a commercial property rather than a residential one and may be valued differently.) 

Foggier

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Re: Appealing property tax appraisal with the city assessor
« Reply #3 on: October 31, 2014, 09:52:25 AM »
Thanks for the encouragement!
Yeah, I have a sales market valuation from the bank's appraisal and can probably get comps/a refreshed one from my previous real estate agent. It would be pretty trivial for me to show it was arm's length as well.

Blindsquirrel

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Re: Appealing property tax appraisal with the city assessor
« Reply #4 on: November 01, 2014, 08:09:14 AM »
 Do it, I would bring purchase HUD1 and print out of MLS advertisement for house now so you have it when you need it. Realtor can get it. Stick to your guns as sale price is best indicator of value and the MLS ad shows it as arms length transaction.